Carriage, Import Duty & Transport Insurance: Codes 5100, 5101 & 5102

Getting stock from a supplier to the business rarely costs nothing extra — delivery charges, customs duty on imports, and insurance while goods are in transit all add to the real cost of a purchase, even though they're not the purchase price itself.

The codes, and what each one holds

Code 5100 — Carriage records delivery or freight charges paid to get purchased goods to the business.

Code 5101 — Import Duty records customs duty paid on goods brought in from outside the UK.

Code 5102 — Transport Insurance records insurance taken out to cover goods while they're in transit. All three are Purchases & Direct Costs codes and normally carry a debit balance.

Real-world examples across industries

Importer or wholesaler bringing in high-value stock

A wholesaler imports £5,000 of electronics from Asia via a freight forwarder. The freight invoice totals £228 — £220 for the transport itself (the international leg zero-rated, with a small UK handling fee on top) plus £8 VAT on that handling fee: a debit of £220 to 5100 (Carriage), a debit of £8 to 2201, and a credit of £228 to 2100. Customs duty of £350 is charged separately when the shipment clears the border — outside the scope of VAT entirely, so it's a straight debit of £350 to 5101 (Import Duty) and a credit of £350 to 2100, nothing to 2201. Marine cargo insurance covering the shipment in transit costs £620, exempt from VAT rather than zero-rated: a debit of £620 to 5102 (Transport Insurance) and a credit of £620 to 2100. The true landed cost comes to £6,198, well above the £5,000 shown on the supplier's own invoice.

Domestic-only e-commerce retailer

A retailer sourcing entirely from UK suppliers pays a domestic courier £660 (£550 net, £110 VAT) to move stock between its own warehouses — an ordinary standard-rated UK service: a debit of £550 to 5100, a debit of £110 to 2201, and a credit of £660 to 2100. Codes 5101 and 5102 sit at nil permanently for a business like this — there's no duty because nothing crosses a border, and the courier's own built-in liability cover, usually capped at a modest amount per parcel, does the job that separate transport insurance would otherwise do.

Manufacturer sourcing components under a trade agreement

A manufacturer buying components from an EU supplier under a preferential trade agreement can find its import duty rate is 0% for that specific tariff classification, so 5101 stays at nil for that shipment despite the goods genuinely being imported — the rate depends entirely on how the goods are classified, not on the size of the business or how regularly it imports. Carriage for the same shipment, £180 (£150 net, £30 VAT), is posted as normal: a debit of £150 to 5100, a debit of £30 to 2201, and a credit of £180 to 2100.

Why this matters day to day

Recording these costs separately, rather than folding them into the headline materials cost, means a business can see exactly how much of its purchasing budget is going on logistics rather than the goods themselves — useful when comparing suppliers or renegotiating freight contracts. Import duty in particular is worth tracking closely since it isn't reclaimable in the way VAT usually is, so it directly increases the true cost of imported stock.